📊 ARQT Key Takeaways
Is Arcutis Biotherapeutics, Inc. (ARQT) a Good Investment?
Arcutis is fundamentally unprofitable with -10.7% net margin and minimal revenue growth of just 1.1% YoY, making it a high-risk biotech despite positive cash generation. The company carries $109.4M in debt with -1.2x interest coverage, creating financial stress that threatens sustainability if profitability does not materialize soon. While positive operating cash flow and solid liquidity ratios ($34.8M cash, 2.68x current ratio) provide near-term runway, the company must demonstrate significant revenue acceleration or profitability improvement to justify its current capital structure.
Arcutis Biotherapeutics shows a meaningful improvement in earnings and cash burn, with net loss narrowing sharply and free cash flow close to breakeven. The balance sheet remains reasonably supported by strong liquidity, but profitability is still negative, revenue growth is modest, and weak interest coverage limits the margin for error.
Arcutis Biotherapeutics, Inc. Key Strengths (ARQT)
- Positive operating cash flow of $2.2M despite operating losses, suggesting underlying business viability
- Strong liquidity position with current ratio of 2.68x and quick ratio of 2.46x
- Moderate leverage at 0.58x debt-to-equity with $189.6M stockholders' equity providing financial cushion
- Net income and diluted EPS improved substantially year over year, indicating better operating discipline and scaling
- Liquidity is solid, with current and quick ratios near 3x, supporting near-term funding flexibility
- Free cash flow deficit is relatively small, suggesting the business is approaching cash flow breakeven
ARQT Stock Risks: Arcutis Biotherapeutics, Inc. Investment Risks
- Unprofitable operations with -8.6% operating margin and -10.7% net margin; operating losses of $9.1M
- Severely anemic revenue growth of only 1.1% YoY in highly competitive pharmaceutical sector; unsustainable at current burn rate
- Negative interest coverage of -1.2x indicates operating income cannot service $109.4M debt load; refinancing risk
- Thin free cash flow margin of 2.1% is unsustainable if operations deteriorate; only $34.8M cash available
- Zero capital expenditures is unusual for pharma; may indicate stalled pipeline development or outsourcing problems
- Revenue growth of just 1.1% raises questions about the durability and quality of future expansion
- Operating and net margins remain negative, so the company has not yet demonstrated sustained profitability
- Negative interest coverage and meaningful long-term debt create financing risk if operating performance weakens
Key Metrics to Watch
- Revenue growth trajectory and pipeline progress (must accelerate significantly from 1.1%)
- Path to operating profitability and operating margin improvement
- Free cash flow sustainability and cash burn rate relative to $34.8M cash reserves
- Debt refinancing needs and ability to service interest obligations from operations
- Sustained product revenue growth and operating margin improvement
- Operating cash flow consistency relative to debt servicing needs
Arcutis Biotherapeutics, Inc. (ARQT) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 2.1% FCF margin may limit capital allocation flexibility. Strong liquidity with a 2.68x current ratio provides a solid financial cushion.
ARQT Profit Margin, ROE & Profitability Analysis
ARQT vs Healthcare Sector: How Arcutis Biotherapeutics, Inc. Compares
How Arcutis Biotherapeutics, Inc. compares to Healthcare sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Arcutis Biotherapeutics, Inc. Stock Overvalued? ARQT Valuation Analysis 2026
Based on fundamental analysis, Arcutis Biotherapeutics, Inc. shows some fundamental concerns relative to the Healthcare sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Arcutis Biotherapeutics, Inc. Balance Sheet: ARQT Debt, Cash & Liquidity
ARQT Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Arcutis Biotherapeutics, Inc.'s revenue has grown significantly by 9,994% over the 5-year period, indicating strong business expansion. The most recent EPS of $-3.78 indicates the company is currently unprofitable.
ARQT Revenue Growth, EPS Growth & YoY Performance
ARQT Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $63.8M | -$11.3M | $-0.09 |
| Q3 2025 | $44.8M | $7.4M | $0.06 |
| Q2 2025 | $30.9M | -$15.9M | $-0.13 |
| Q1 2025 | $21.6M | -$25.1M | $-0.20 |
| Q3 2024 | $8.1M | -$35.4M | $-0.33 |
| Q2 2024 | $4.8M | -$35.4M | $-0.42 |
| Q1 2024 | $2.8M | -$35.4M | $-0.32 |
| Q3 2023 | $725.0K | -$44.8M | $-0.73 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Arcutis Biotherapeutics, Inc. Dividends, Buybacks & Capital Allocation
ARQT SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Arcutis Biotherapeutics, Inc. (CIK: 0001787306)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Jun 9, 2026 | 4 | xslF345X06/wk-form4_1781054489.xml | View → |
| Jun 9, 2026 | 4 | xslF345X06/wk-form4_1781054483.xml | View → |
| Jun 9, 2026 | 4 | xslF345X06/wk-form4_1781054477.xml | View → |
| Jun 9, 2026 | 4 | xslF345X06/wk-form4_1781054471.xml | View → |
| Jun 9, 2026 | 4 | xslF345X06/wk-form4_1781054465.xml | View → |
❓ Frequently Asked Questions about ARQT
What is the AI rating for ARQT?
Arcutis Biotherapeutics, Inc. (ARQT) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 74% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ARQT's key strengths?
Claude: Positive operating cash flow of $2.2M despite operating losses, suggesting underlying business viability. Strong liquidity position with current ratio of 2.68x and quick ratio of 2.46x. ChatGPT: Net income and diluted EPS improved substantially year over year, indicating better operating discipline and scaling. Liquidity is solid, with current and quick ratios near 3x, supporting near-term funding flexibility.
What are the risks of investing in ARQT?
Claude: Unprofitable operations with -8.6% operating margin and -10.7% net margin; operating losses of $9.1M. Severely anemic revenue growth of only 1.1% YoY in highly competitive pharmaceutical sector; unsustainable at current burn rate. ChatGPT: Revenue growth of just 1.1% raises questions about the durability and quality of future expansion. Operating and net margins remain negative, so the company has not yet demonstrated sustained profitability.
What is ARQT's revenue and growth?
Arcutis Biotherapeutics, Inc. reported revenue of $105.4M.
Does ARQT pay dividends?
Arcutis Biotherapeutics, Inc. does not currently pay dividends.
Where can I find ARQT SEC filings?
Official SEC filings for Arcutis Biotherapeutics, Inc. (CIK: 0001787306) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ARQT's EPS?
Arcutis Biotherapeutics, Inc. has a diluted EPS of $-0.09.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is ARQT's fundamental grade?
Based on our AI fundamental analysis in June 2026, Arcutis Biotherapeutics, Inc. has a C grade with 74% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is ARQT stock overvalued or undervalued?
Valuation metrics for ARQT: ROE of -6.0% (sector avg: 15%), net margin of -10.7% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
What is ARQT's AI grade for 2026?
Our dual AI analysis gives Arcutis Biotherapeutics, Inc. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is ARQT's free cash flow?
Arcutis Biotherapeutics, Inc.'s operating cash flow is $2.2M, with capital expenditures of $0.0. FCF margin is 2.1%.
How does ARQT compare to other Healthcare stocks?
Vs Healthcare sector averages: Net margin -10.7% (avg: 12%), ROE -6.0% (avg: 15%), current ratio 2.68 (avg: 2).